Sprint CEO: T-Mobile in for a 'rude awakening' in network battle
Marcelo Claure says his network has improved to the point that it is competitive, but adds he doesn't care if Sprint is the No. 3 or No. 4 carrier.
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Sprint Chief Executive Marcelo Claure is ready to turn up the heat on his rivals with a network he believes has improved enough to keep his company in the game.
The nation's third-largest carrier has over the past two years taken a beating for the quality of its network. A lengthy and complex upgrade plan has weighed on its service, resulting in poor coverage and lower download speeds for customers. Few have been more visibly critical than T-Mobile CEO John Legere, who regularly uses Twitter as a vehicle to slam his competitor's network.
"Half-assed commercial, half-assed data speeds," Legere tweeted on Sunday after watching Sprint's Super Bowl ad.
That Legere has grown more vocal is no coincidence. Sprint has aggressively rolled out new promotions and discount programs, underscoring the heightening competition in the wireless industry that has resulted in cheaper smartphone plans and more data for customers. While Sprint has focused on competing on price, its reputation for poor network quality has continued to dog the company. But things are poised to change, according to Claure.
"I think Legere is in for a rude awakening when new scores come out about network performance," Claure said in an interview on Thursday. "I let actions speak."
Claure said he expects Root Metrics, a network testing firm acknowledged by several carriers to be a credible barometer of coverage quality, to come out with its data in the coming weeks, and for Sprint to have a strong showing. He already touted its rank in Chicago, where it is second behind Verizon Wireless, as a sign of its improvement. In the markets where Sprint has improved, consumers will start to see more heavy advertising, he added.
Legere, however, dismissed Claure's comments and called the Root Metrics data outdated. T-Mobile cites Speedtest.net in its claim to America's fastest network. The carrier argues Speedtest.net is more relevant because it uses data pulled from consumers who run their own speed tests through the app. The data collected by firms like Root Metrics don't keep up with its pace of network improvements, he added.
"If I were them, I'd be clinging to months-old data too," Legere said in an email. "Everyone knows that Sprint has the worst network customer satisfaction in the industry -- by a mile."
Root Metrics declined to comment.
Sprint earlier Thursday reported fiscal third-quarter results that saw the company return to customer growth, which was enough to keep it ahead of T-Mobile. Legere had previously said he had expected to surpass Sprint by the end of 2014, and believes he will still hit that goal this year.
Claure isn't arguing with that prediction.
"T-Mobile has great momentum," he said. "I'm focused on fixing the fundamentals whether we're No. 3 or No. 4. Customers don't care about rank. I'm not worried about whether we're No. 3 or No. 4."
That's not to say Sprint is giving up. Claure said he plans to launch a new set of pricing plans as soon as April based on the customer research it is conducting. That could include the ability to roll over data, which T-Mobile and AT&T offer, pricing tweaks to its unlimited plans, a cheaper plan for people who want less data and other options. He said the plans will fall under a more simplified pricing strategy.
Sprint is also working on retaining customers by utilizing custom offers to individuals, which will include moving them on to more attractive rate plans. To improve the perception of its network, Claure said he would push to get more customers to upgrade to smartphones capable of picking up faster LTE signals. He said the no-money-down lease has driven phone adoption, noting that a third of Sprint's new customers opted for the program.
"On operational trends, the Sprint platform continues to face headwinds," said Simon Flannery, an analyst at Morgan Stanley.
Claure said he still believes the biggest opportunity for growth lies in taking customers away from Verizon Wireless and AT&T.
"Many customers believe that AT&T and Verizon are overpriced, so we cater to those customers that want to go to Sprint," he said.
Still, for Claure, who like Legere is on Twitter (and confirmed that he likewise manages his own account), it's hard to stay above the fray. He briefly exchanged barbs -- and selectively snide retweets -- with the T-Mobile CEO after the Super Bowl. He says he doesn't take it personally.
"I look at it as friendly competition," Claure said.
Updated at 11:13 a.m. PT: To include a comment from T-Mobile CEO John Legere.